Power Outage in Orenburg, Russia Due To Bitcoin Mining Operation

Russia has always been an interesting country when it comes to cryptocurrency. Government officials remain on the fence about whether or not to allow this industry to thrive. The Russian Interior Ministry has suddenly decided to halt several Bitcoin mining operations due to the “misappropriation of electricity” in Orenburg.

BITCOIN MINING IN ORENBURG IS PROBLEMATIC

There have been many reports regarding the electricity use of Bitcoin mining operations. A lot of mining ventures use so much electricity that they can overload the power grid. Not every part of the world can deal with this increased demand for electricity, though. In Orenburg, Russia, it seems the misappropriation of electricity is frowned upon by government officials.

Indeed, the Interior Ministry is cracking down on any Bitcoin mining activity in that region as of right now. In this case, they received a statement from a local energy company claiming that it lost electricity. It seems this particular outage was caused by an overload of the power grid, allegedly the direct result of various Bitcoin mining operations in the city.

After a thorough investigation was launched by local police, it quickly became apparent that a major Bitcoin mining operation was underway. Authorities seized a total of 6,000 ASIC miners in the process, which is a rather substantial amount. It also goes to show how many people mine Bitcoin in Russia, as well as the lengths to which they will go to ensure their operation generates a profit.

All that high-tech equipment has only one purpose: it allows people to mine cryptocurrencies. However, the consumption of electricity associated with this project was supposedly equal to 8 million KWh. That number seems a bit overstated, but it is evident this region’s infrastructure cannot sustain such demand for a long period of time. In most cases, an overload will lead to power outages, which is apparently what happened in Orenburg.

For the time being, it remains unclear what will happen to the confiscated equipment and the people operating this Bitcoin mining setup. Several suspects have been identified, including two “managers”. An official criminal investigation is pending, even though it is unclear what will come of it.

Rest assured this is not the last time we will see incidents like these take place in Russia. The country’s government has made it clear it will maintain a negative stance toward cryptocurrencies and any activity associated with it. Whether or not this will lead to even more criminal investigations is a different matter altogether. Misappropriation of electricity is a major offense in Russia; that much is evident.

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JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world's leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.